FRESH AIR
Hedge fund manager Kyle Bass had made a fortune betting against the subprime mortgage market when it collapsed in 2008. And now Bass is set to make lots more — from a Greek default. Bass’ story is chronicled in Michael Lewis’ latest book, Boomerang: The Meltdown Tour, which tells the stories of the fiscal recklessness in both Europe and the U.S. that led to the current debt crisis. Lewis tells Fresh Air‘s Terry Gross that Bass realized that governments around the world weren’t ending the 2008 financial crisis — they were just delaying it. So Bass decided that they would also likely fail. “What he saw was that the debts that had been accumulating in the banking system were too large for governments to handle in some countries,” Lewis says. “In Ireland, the debts in the banking system were eight times the size of government tax revenues. In Iceland, it was even worse. It was bad throughout Europe. So he basically said, ‘What happens the next time there’s doubt in the system?’ People are going to ask the question, ‘Can governments afford to bail out these banks?’ And the answer the next time is going to be no … and then it’s really ugly because there isn’t a backstop.” MORE
GEOFFREY NUNBERG: “Class warfare” was a dodgy phrase from the outset. In one of the most famous sentences in the history of political thought, Marx and Engels wrote in their 1848 Communist Manifesto: “The history of all society up to now is the history of …” That’s where things get complicated. In the original German they wrote Klassenkampfen, which means “class struggles.” But some of their critics rendered it more belligerently as “class warfare.” That was the stock label they put on the bearded socialist agitator in political cartoons. And some socialists actually did use it, while others tried to turn it around to describe the capitalist oppression of labor. But “warfare” more readily suggested the disorderly violence that broke out from below. It conjured up the red flags, cloth caps and barricades of Les Mis, not the measured operations of the parliaments and law courts on the side of the bourgeoisie. It was those violent overtones that endeared “class warfare” to the right and spared it the fate of Marxist jargon like “proletariat,” “class struggle” and “the masses.” Even the left has bailed on those expressions. They’re only about a quarter as common in the pages of the New Left Review as they were in the 1970s. But “class warfare” has been on a tear in the language of the right — it’s used five times as often in The Wall Street Journal now as it was 40 years ago. In fact, the phrase has actually become more frequent as the marginal tax rates have gone down. It’s sort of a revenant, a specter that haunts the English language whenever appeals for making the rich pay more are heard in the land. MORE